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(e) In the case of vessels in respect of which total losses have been paid by underwriters, the return to a Government under the arrangements agreed in this Memorandum will be subject to the safeguarding of any rights which underwriters may have. Thus, when the owner of a vessel whether a United Nations Government or a National of a United Nations Government, has been indemnified by the underwriters, the turning over of a vessel to that Government without taking into account such indemnification, would be in the nature of a gift and in such circumstances appropriate equitable adjustments will be made between the Governments concerned.

PART III
Definitions

1. Throughout this Memorandum the term "territory" is used to include Colonies, protectorates and overseas territories or territories under suzerainty

or mandate.

2. Throughout this Memorandum the term "vessels" is used in the widest sense to include all categories of merchant vessels, e.g. ocean going, coastal and inland craft, but some latitude may be necessary in the application of all its principles to inland craft.

3. Further, the term "vessels" includes merchant vessels which, though operating as naval auxiliaries when captured or found, were not so operating at the time when they fell into the hands of the enemy. Vessels which at the time when they fell into enemy hands were operating as naval auxiliaries are not covered by the proposals set out in this Memorandum.

4. If for any operation or series of operations there is a Supreme Commander-in-Chief, then he is for the purpose of this Memorandum the Commander-in-Chief. If, however, the Naval Command is separate from the Land Command, then for the purpose of this Memorandum the Naval Commander-in-Chief is the Commander-in-Chief as regards ocean going and coastal vessels and the Land Commander-in-Chief as regards all other vessels.

The Acting Secretary of State to the British Ambassador

DEPARTMENT OF STATE

EXCELLENCY:

WASHINGTON
June 15, 1945

I have the honor to refer to your note of May 7, 1945 (reference 826/8/ 45) and to previous communications regarding the disposition to be made of vessels recaptured from the enemy in the European theater of operations and formerly belonging to one of the United Nations or to its nationals. With your note was enclosed a memorandum entitled "Memorandum relating to

the use and disposal of United Nations vessels captured or found in the course of operations for the liberation of Europe".

In your note it is stated that His Majesty's Government in the United Kingdom understands that the Government of the United States of America is willing to apply the principles of that memorandum to vessels of all the United Nations on a reciprocal basis and, with this end in view, will enter into similar agreements with all other United Nations willing to do so, and will further take such steps as may be necessary to insure that claims in the nature of prize salvage will not be advanced in the United States courts against British vessels recaptured in the course of the operations covered by the memorandum or against other vessels so recovered being vessels of the other United Nations entering into similar arrangements. In this connection you call attention to the British Prize Salvage Act, 1944.

You further state that "on these understandings and with these expressions of intent the present memorandum meets with the approval of His Majesty's Government in the United Kingdom". You add that if it likewise meets with the approval of the Government of the United States of America, your note, together with the reply indicating such approval and concurrence by the Government of the United States of America, will be regarded as constituting an agreement between the two countries. You further suggest that the agreement should be regarded as being in effect from October 22, 1943.

I have the honor to inform you that the Government of the United States of America approves the memorandum in question and concurs in the understandings expressed in your note, and will apply the principles embodied in the memorandum, on a reciprocal basis, to British vessels and to the vessels of other members of the United Nations which enter into similar agreements with the United States of America.

In accordance with the suggestion made in your note, that note and the present note in reply will be regarded as constituting an agreement between the Government of the United States of America and His Majesty's Government in the United Kingdom, which will be regarded as being in effect from October 22, 1943.

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In view of the present agreement in the case of British vessels, the Government of the United States of America undertakes, on a reciprocal basis, to take such steps as may be necessary to insure that claims in the nature of prize salvage will not be advanced in the United States courts against British vessels recovered in the course of the operations covered by the memorandum. In case similar agreements are concluded by the United States of America with other members of the United Nations, the United States of America will also undertake on the basis of reciprocity to take such steps as may be necessary to insure that claims in the nature of prize salvage will not be advanced in the United States courts against vessels of such other members

of the United Nations recovered in the course of the operations covered by the memorandum.

Accept, Excellency, the renewed assurances of my highest consideration. JOSEPH C. GREW Acting Secretary of State

His Excellency

The Right Honorable

THE EARL OF HALIFAX, K.G.,

British Ambassador.

LEND-LEASE SETTLEMENT

Joint statement initialed at Washington December 6, 1945

Amended by agreements of April 28 and 30, 1952,1 and April 24 and 25

1957, as supplemented 3

Modified and supplemented by agreement of July 12, 1948 *

60 Stat. 1564; Treaties and Other International Acts Series 1509

JOINT STATEMENt Regarding Settlement for Lend-Lease, RecIPROCAL AID, SURPLUS WAR PROPERTY AND CLAIMS

1. The Governments of the United States and the United Kingdom have reached an understanding for the settlement of Lend-Lease and Reciprocal Aid, for the acquisition of United States Army and Navy surplus property, and the United States interest in installations, located in the United Kingdom, and for the final settlement of the financial claims of each government against the other arising out of the conduct of the war. Specific agreements necessary to implement these understandings, setting forth the terms in detail, and consistent herewith, are in the course of preparation and will shortly be completed.5

2. This settlement for Lend-Lease and Reciprocal Aid will be complete and final. In arriving at this settlement both Governments have taken full cognizance of the benefits already received by them in the defeat of their common enemies. They have also taken full cognizance of the general obligations assumed by them in Article VII of the Mutual Aid Agreement of February 23, 1942, and the understandings agreed upon this day with regard to commercial policy. Pursuant to this settlement, both Governments will continue to discuss arrangements for agreed action for the attainment of the economic objectives referred to in Article VII of the Mutual Aid Agreement. The Governments expect in these discussions to reach specific con

6

13 UST 4180; TIAS 2562.

28 UST 771; TIAS 3834.

3 Exchange of notes at Washington May 1 and 3, 1957 (not printed).

TIAS 1770, post, p. 897.

For texts of nine specific agreements, annexed to memorandum signed at Washington Mar. 27, 1946, see TIAS 1509, post, p. 745.

6

EAS 241, ante, p. 605.

7 TIAS 1545, post, p. 703.

clusions at an early date with respect to urgent problems such as those in the field of telecommunications and civil aviation. In the light of all the foregoing, both Governments agree that no further benefits will be sought as consideration for Lend-Lease and Reciprocal Aid.

3. The net sum due from the United Kingdom to the United States for the settlement of Lend-Lease and Reciprocal Aid, for the acquisition of surplus property, and the United States interest in installations, located in the United Kingdom, and for the settlement of claims shall be $650,000,000 subject to the accounting adjustment referred to below. This amount consists of (a) a net sum of $118,000,000 representing the difference between the amount of the services and supplies furnished or to be furnished by each Government to the other Government after V-J Day through Lend-Lease and Reciprocal Aid channels, less the net sum due to the United Kingdom under the claims settlement, and (b) a net sum of $532,000,000 for all other Lend-Lease and Reciprocal Aid items, and for surplus property, and the United States interest in installations, located in the United Kingdom and owned by the United States Government. The actual amounts due to the respective Governments for items included in (a) above other than claims will, however, be ascertained by accounting in due course, and the total sum of $650,000,000 will be adjusted for any difference between the sum of $118,000,000 mentioned above and the actual sum found to be due. All new transactions between the two Governments after December 31, 1945, will be settled by cash payment.

4. The total liability found to be due to the Government of the United States will be discharged on the same terms as those specified in the Financial Agreement concluded this day for the discharge of the credit provided therein.

5. In addition to the financial payments referred to above, the two Governments have agreed upon the following:

(a) Appropriate non-discriminatory treatment will be extended to United States nationals in the use and disposition of installations in which there is a United States interest;

(b) Appropriate settlements for the Lend-Lease interest in installations other than in the United Kingdom and the Colonial Dependencies will be made on disposal of the installations;

(c) The United States reserves its right of recapture of any Lend-Lease articles held by United Kingdom Armed Forces, but the United States has indicated that it does not intend to exercise generally this right of recapture;

(d) Disposals for military use to forces other than the United Kingdom Armed Forces of Lend-Lease articles held by the United Kingdom Armed Forces at V-J Day, and disposals for civilian use other than in the United Kingdom and the Colonial Dependencies of such Lend-Lease articles, will be made only with the consent of the United States Government and any net proceeds will be paid to the United States Government. The United King

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